WASHINGTON, D.C. - Mayor Anthony A. Williams today announced the launch of the D.C. College Savings Plan, an investment program that encourages families to save for higher education expenses. The plan allows low initial contributions, provides a variety of investment options, and offers special tax benefits - features that make it attractive to District residents as well as non-residents nationwide.

"Rising college costs can place a severe burden on many families," said Mayor Williams.

"With the D.C. College Savings Plan and our existing D.C. Tuition Assistance Grant Program, we now have a potent combination of tools to help make educational dreams a reality for District residents."

With a $100 minimum contribution, parents, grandparents, relatives and friends can set up a D.C. College Savings Plan account for anyone - including themselves. The plan also offers a low initial contribution minimum of $15 for payroll deduction through a participating employer or $25 for automatic contributions through a bank. For District residents, there is no charge to enroll in the D.C. College Savings Plan and only a $15 annual maintenance fee. Non-District residents will pay $25 to enroll and $30 annually for account maintenance.

The plan offers three ways to invest: 1) an age-based portfolio with five age bands that change the proportion of equity, bond and money market funds as the account beneficiary reaches pre-determined ages; 2) six single fund investment options ranging from conservative to aggressive in risk level; and 3) a stability of principal investment that guarantees the D.C. College Savings Plan both a return of money invested and a fixed rate of return of at least three percent.

Earnings are federal-tax-free as long as the money remains in the account. When funds are used to pay for qualified higher education expenses - such as tuition, room and board, books and supplies at qualified post-secondary institutions - the distributions are currently exempt from federal, District, and some states' income tax.

District residents also enjoy significant tax breaks by participating in the plan. All District residents can receive up to $3,000 per taxpayer in annual District tax deductions, or up to $6,000

for married couples filing jointly where each taxpayer owns an account. If contributions exceed the allowed deduction in a calendar year, the excess can be carried forward and deducted in subsequent tax years for up to five years. Residents who want to use the deduction when filing their year 2002 taxes must ensure that the plan manager receives their contributions by December 31, 2002.

"The District government is excited about offering a 529 college savings program, as continuing education is a high priority in the District of Columbia," said Chief Financial Officer Natwar M. Gandhi. "We want to offer residents incentives for saving."

District Treasurer N. Anthony Calhoun, who leads the office administering the D.C. College Savings Plan, is confident that the city has created a plan that will be competitive with 529 plans across the country. "The project team went to great lengths to ensure that the District's plan will be positioned among the top state-sponsored college savings programs," said Calhoun.

Calvert Asset Management Company, Inc. will provide investment management services, as well as record-keeping and other program related services. Headquartered in Bethesda, Md., Calvert is a subsidiary of The Ameritas Acacia Companies. With approximately $8.3 billion in assets under management for over 300,000 investors, Calvert has an extensive lineup of tax-free and taxable fixed income investments and offers the largest number of socially responsible mutual funds in the United States.

"Calvert is pleased to be the program manager for the D.C. College Savings Plan. Through our customer service, distribution capabilities and competitive investment options, Calvert is committed to making the District's program one of the best," said Barbara J. Krumsiek, president and CEO of Calvert.

Individuals can enroll in the D.C. College Savings Plan by visiting www.DCCollegeSavings.com, where they can download the program's disclosure booklet and application form, or by calling

1-800-368-2745 (1-800-987-4859 for District residents) to request an enrollment packet. They can also speak with a financial advisor.

Calvert

Calvert

Calvert, a leader in sustainable and responsible investing, headquartered in suburban Washington, D.C., has, since our founding in 1976, set industry standards for asset management excellence - in both the way we select companies for our portfolios and how we serve our clients' interests. Our investment approach emphasizes rigorous fundamental research that goes beyond traditional measures to uncover companies with long-term value. Through proven investment management, attentive customer service, an innovative family of investment products, and strong marketing capabilities, Calvert serves individual and institutional investors nationwide as well as professional financial advisors

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